PACRA Assigns Initial Ratings to Gas & Oil Pakistan Limited | GO Short Term Sukuk | PKR 10bln | Jan-26

Gas & Oil Pakistan Limited ("GO" or "the Company") benefits from a strategic partnership with Aramco, which holds an equity stake of ~40%, leveraging the global energy giant's resources to reshape Pakistan’s OMC landscape and GO’s market position. The financially sound sponsors contribute deep expertise across the energy supply chain, while governance has been reinforced through the induction of Aramco's representatives onto the Board of Directors and into key management roles. Future growth is expected to be augmented by entry into the lubricants segment via Valvoline. Operationally, GO maintains a substantial footprint, running an extensive retail network of about 1,329 outlets, including 80 COCO sites, many successfully rebranded under the Aramco name. Furthermore, the Company holds the sector’s second-largest storage capacity (~205,038 metric tons) and supplements income through hospitality services. Its operations encompass the procurement, storage, distribution, and marketing of petroleum, oil, and lubricants (POL) sourced both locally and internationally. Ranked among the top-tier OMCs by both volumetric sales and retail presence, GO has successfully stabilized its business and financial risk profile. During CY25, the Company has witnessed significant topline growth, clocking at ~PKR 619.6bln (CY24: PKR 327.8bln), reflecting the growth of ~89.0%. With improving profitability, a trajectory expected to persist due to effective marketing initiatives and sustained, stable cash flows. While the trade debts, mainly constituting government entities, corporate customers, and dealers stood at ~PKR 53.4bln (CY24: ~PKR 36.4bln), a growth of ~46.7%, is substantially slower than the annualized revenue growth, reflecting prudent working capital discipline, and is further supported by the implementation of a Board-approved credit policy aimed at maintaining tighter control over receivable cycles going forward. The Company’s working capital requirements are primarily met through sizable funded and non-funded banking lines, providing adequate liquidity headroom. In addition, the issuance of a Short-Term, Rated, Unsecured, Privately Placed Sukuk of ~PKR 10bln has further diversified the short-term funding base and strengthened liquidity management. Furthermore, substantial supplier credit extended by Aramco provides an additional liquidity cushion, thereby optimizing and moderating reliance on bank borrowings while maintaining access to ample committed credit facilities. Strong coverage indicators further reinforce the Company’s financial cushion. The capital structure was strengthened through Aramco’s rights issue, enhancing financial flexibility and supporting growth.
The ratings are dependent on keeping the growth trajectory, as a consequence of the above-mentioned association with Aramco, including continuity of governance and other control-related matters.

About the Entity
GO was incorporated as a public unlisted company in 2012 under the repealed Companies Act 2017. The Company obtained the OMC license from OGRA in 2019. GO is engaged in the procurement, storage, distribution, and marketing of POL products and lubricants. Aramco holds ~40% stake in the Company, while ~60% stake resides with GO. Mr. Shahid Mehmood Khan chairs the Board, while Mr. Khalid Riaz heads the Company as the CEO.

About the Instrument
GO has successfully issued a Short-Term, Rated, Unsecured, and Privately Placed Sukuk in January 2026. The Sukuk has an aggregate issue size of PKR 10.0 billion, with an additional green shoe option of up to PKR 4.0 billion. The instrument carries a tenor of six months from the date of drawdown. The Sukuk offers a profit rate of 6MK + 40bps. The proceeds have been raised to finance the Company’s working capital requirements. Each Sukuk certificate has a face value of approximately PKR 1.0 million. The instrument will be redeemed at par through a single bullet payment upon maturity.